WASHINGTON (December 20, 2023) – The American Chemistry Council (ACC) reached out to the Administration to urge their release of long-awaited draft guidance on eligibility criteria for the Section 45V Clean Hydrogen Tax Credit. The following statement may be attributed to ACC Senior Director for Energy, Climate and Environment Charles Franklin.
“ACC and its members believe that the outcome of this guidance could have a meaningful impact on accelerating U.S. development of a clean hydrogen economy. The 45V tax credit may be one of the more important elements of the lower emissions economy framework as defined by the Inflation Reduction Act (IRA) and Bipartisan Infrastructure Law (BIL). In fact, the outcome of this guidance could determine whether the tax credit can successfully accelerate national development of a clean hydrogen economy.
“In our letter to the Administration, we also emphasized the need for flexibility in defining the projects and conditions necessary for companies to quality for the 45V tax credit. This flexibility is not only important to our members, but it’s also necessary to help meet the Administration’s own goals in advancing a clean hydrogen economy, particularly its “Hydrogen Shot™” goal of reducing the cost of clean hydrogen production to $1 per 1 kilogram in 1 decade.
“In fact, Congress recognized the need for such flexibility in the BIL and IRA. For example, the BIL directed the Department of Energy to develop a hydrogen strategy that, in part, focuses on a range of production and use methods including natural gas, coal, renewable energy sources, nuclear energy, and biomass. The IRA’s framework for the 45V Tax Credit itself implicitly incorporated opportunities for flexibility, starting with the graduated Tax Credit values based on different clean hydrogen technologies and supply chains.
“The U.S. chemical sector is incredibly diverse, touching every sector of the economy throughout the value chain. The chemical sector is also one of the primary sources of hydrogen production today, and one of the most promising sectors for low-carbon hydrogen production in the future. Our industry’s process expertise, and access to opportunities to build new markets, makes our sector a critical stakeholder and future partner in the Administration’s efforts to rapidly build out national supply of clean hydrogen economy.
“We look forward to a continued, productive dialogue with the Administration to implement these critical industrial emissions reduction incentives and pave a path forward to enhance and enable clean hydrogen production.”